Day trading, with its potential for quick profits and rapid market movements, can be alluring and adrenaline-pumping. However, without a well-defined plan and a specific budget in place, it can lead to overtrading and financial pitfalls. This article will explore why day trading with a plan and adhering to a weekly budget are essential for success and how the innovative NeverLossTrading approach can amplify your trading journey.
Setting the Foundation with a Plan
Day trading without a plan is like navigating uncharted waters without a map. A solid trading plan is your compass, guiding your actions and decisions in the market. It outlines your trading goals, preferred markets, risk tolerance, entry and exit strategies, and more. With a plan in place, you gain clarity and direction, allowing you to approach each trading session with a focused and strategic mindset.
We developed systems, indicators, and strategies to act at crucial price turning points that will lead by a high probability to directional price moves with:
- System-specified price thresholds to enter trades so that you can operate with buy-stop and sell-stop orders in the development of a price move
- Forecasting high probable exit points where your trades close with limit-orders
- Set risk/reward-adequate stops to bring your trade to target and not violate risk acceptance rules
- Multiple indicators confirm crucial price turning points, increasing the probability of success by combining strong price move indications with channel breaks and no hindrance to the target.
Unfortunately, many who see the potential in day trading never learn what it takes to be successful and harm their trading accounts.
Day Trading Success Variables
| What is Needed | Why 76% Fail |
| Focus on crucial price turning points where buyers take over from sellers or vice versa, considering the overall price pattern: A high-probability systemforecasts future price actions at or above 65% with bar-by-bar indications. The statistical likelihood at a 65% chance of winning six or more out of ten trades is 75% | Acting spontaneously, not considering overall price patterns, and either working with a low probability system, below 55% accuracy or deciding nonfact based to take trades. In essence, the likelihood of winning six or more out of ten trades is 50.4% or random |
| Acceptable risk and reward relation. We could write a long paragraph, but your system needs to give you a solid forecast of likely price moves from entry to target and dimension the stop so you have a chance to close the trade in your favor | Allowing a high-risk tolerance is not a success principle; individual failures will drag down prior attainments, resulting in a negative balance. Opposite, when one only allows a tight risk tolerance, it constantly triggers stops, and nothing gets achieved |
| Trading is all about risk control and understanding that underlying securities’ price action at certain times of the day is riskier than at others | Novice day traders neglect time-based happenings and transact when they have time, not when the market best allows |
| Following a trading plan that specifies when to trade, when not, and how often | Frequent transactions without following a defined concept and plan |
A simple trading plan includes two components:
- Which situations or chart setups will be favored
- How often to transact to achieve a set goal
Most traders strive for a positive winning average and take a high emotional toll when they face a losing streak. After four losses in a row, most people have no more confidence in their system and interact with trades instead of letting them come to system-specified targets.
Losses take a high emotional toll, often leading to unstructured trading decisions. Therefore, we want to introduce you to a strategy to minimize the maximum possible loss while striving for a specific set outcome.
Let us pick day trading futures as an example. To get started, we work with you to achieve a pre-specified target of $1,000, trading one futures contract of /ES (E-Mini S&P 500). Depending on your broker, the required capital to apply this trading principle ranges between $500 and $12,000.
When you reach your weekly budget goal, you fold your trading activities. Then, after successfully producing the desired return for multiple weeks, you can scale up by adding contracts.
With the help of your system, you specify high-probability setups, considering multiple evaluation points instead of just taking every opportunity on the go.
Your focus and effort are on a sound appraisal process rather than action-oriented trading.
As a day trader, you need to know daily economic news events that can impact the price action of the underlying instrument of your choice. We help our subscribers by announcing them daily on our Telegram Channel. To get you in the groove, we invite you to join our channel and stay updated with the overall market sentiment and when vital events may impact the market (this link will only be active in the short term).
NLT Day traders learn to consider time-based channels, where critical price points attract or reject evolving price moves. As a special offer, we will include those channels for all new subscribers (the offer ends on Memorial Day 2023), regardless of the systems chosen. This concept aims to find situations where strong system indications announce a potential price move, and you only carry out trades at channel breaks, increasing the likelihood of success to 70%.
Following our principle, a few trades help you to achieve the weekly goal. Hence, selecting your trades well when confirming indications increases the likelihood of success instead of risking your money at mediocre setups.
We best share time-based price channels by adding chart examples of the week of July 17, where we took four trades and did, with one transaction on Monday, Tuesday, Thursday and Friday.
Overtrading, driven by emotions and the urge to capitalize on every market move, is a common pitfall among day traders. Setting a specific weekly budget acts as a safeguard against overtrading. You avoid emotional decision-making and stick to your trading plan by allocating a predetermined amount for each trading week. This disciplined approach protects your capital, reduces the risk of significant losses, and fosters a long-term view of trading success.
Here are the four trades executed:
/ES July 17, 2023, Day Trading Example
With our systems, there are rules to learn. As in the cockpit of an airplane, you will learn to read the charts and act along with them, letting the chart tell when to buy or sell.
In the following example, we will share a channel breakout trade for the E-Mini S&P 500 futures contract. Indeed, our indicators also work for other assets like stocks and FOREX. If you want to see how they perform life:
contact@NeverLossTrading.com Subj.: Day Trading Demo
/ES July 18, 2023, Day Trading Example
In the example above, we combined the signal: Buy > $4561.75 with the break of the red channel and went long in the underlying instrument. The transaction was open for about 18 minutes and closed on the system-set target for a return of $300 per contract.
Considering the rules of a series, we regularly stop trading an instrument after the first win. Why that?
We apply statistical reasons when you play a game with a 70% likelihood of winning; having two winners in a row has a likelihood of 70% x 70% = 49% or a 51% chance of losing the second trade.
Hence, as smart traders, we take our profit, settle on the instrument, and find time to do other things while striving for our weekly income budget.
/ES July 20, 2023, Day Trading Example
The chart shows two potential trade situations:
Sell < $4582, which we did not accept, in fear of the price movement to target (dot on the chart), to be rejected by the channel border, which was not the case in the example, but we traded carefully.
Buy > 4579.80 penetrated the channel, and we took the opportunity to set the system target (dot on the chart).
The transaction was open for about 40 minutes and produced $250 per contract.
Following the rule of a series, we closed /ES trading for the day.
So far, the week yielded $287.50, $300, $250 = $837.50 per contract, and we needed one more trade to achieve the set budget.
/ES July 20, 2023, Day Trading Example
Buy > $4572.3 was confirmed in the price movement of the next candle. To aim to the gray channel border and keep risk and reward in a meaningful balance, we placed a limit order filled at 10:43 a.m. ET. The transaction auto-closed in about four minutes for a return of $200, achieving the set budget for the week, acting at crucial price move indications in combination with channel trades.
Our budget-focused approach allows traders to manage trades with precision while preserving capital, and you are not required to spend countless hours in front of the screen. NeverLossTrading incorporates advanced charting software, real-time market data, and comprehensive analytics, empowering traders with deep insights and accurate decision-making tools. By leveraging technology, traders gain an edge in a fast-paced market and can confidently execute trades that align with their predetermined plan. Day trading with a plan, adhering to a weekly budget, and incorporating NeverLossTrading as your ally set the stage for long-term success. Patience, discipline, and continuous learning are the cornerstones of a trader’s journey, and NeverLossTrading reinforces these values by instilling a systematic and methodical approach to trading.
Conclusion
Day trading is a high-stakes endeavor that requires a strategic approach to achieve consistent success. By developing a well-defined trading plan, setting a specific weekly budget, and incorporating NeverLossTrading’s innovative techniques, day traders gain a competitive edge and protect themselves against the pitfalls of overtrading. Remember, planning, discipline, and embracing the NeverLossTrading advantage are your keys to unlocking the path to long-term day trading success. Start your journey today and pave the way for a rewarding and profitable trading future.
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We help our students simplify technical analysis by providing a holistic approach that combines chart patterns, trend analysis, and market indicators. Traders are equipped with practical tools and methodologies to identify high-probability trade setups, helping them make informed decisions based on market trends and price action.
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Executing trades at the right time and price can be challenging, especially in fast-moving markets. NeverLossTrading offers techniques for precise trade entries and exits, allowing traders to capture optimal returns. With its focus on high-probability setups and systematic approach, NeverLossTrading helps traders improve their trade execution and timing, maximizing their profit potential.
The financial markets are dynamic and ever-evolving, requiring traders to stay updated and continuously learn. NeverLossTrading promotes a culture of continuous learning, providing educational resources, webinars, and personalized mentoring. Traders gain access to a wealth of knowledge and expertise, empowering them to adapt to changing market conditions and enhance their trading skills.
Trading challenges are an inherent part of the financial markets, but with the solutions offered by NeverLossTrading, traders can overcome these hurdles and thrive in their trading endeavors. By addressing emotional biases, providing effective risk management techniques, simplifying technical analysis, optimizing trade execution, and fostering continuous learning, NeverLossTrading equips traders with the tools and knowledge needed for success. Embrace the solutions provided by NeverLossTrading, and embark on a journey toward consistent profitability and trading excellence.
To succeed in trading, you best work with an experienced coach. Our #1 competitive advantage is the support and customer service we offer. Veteran traders have been through more ups and downs than you can imagine. So, experienced pros have probably experienced whatever you’re going through. If you are ready to make a difference in your trading: We are happy to share our experiences and help you build your trading business. Trading is not a typical career, and you best learn from those who are long-term in this business to cope with the rollercoaster of the financial markets. We are here to help and provide feedback on what you might be doing right or wrong. Strive for improved trading results, and we will determine which of our systems suits you best. The markets changed, and if you do not change your trading strategies with them, it can be a very costly undertaking. Hence, take trading seriously, build the skills, and acquire the tools needed. Trading success has a structure you can learn and follow.
Thomas Barmann (inventor and founder of NeverLossTrading)
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